Abstract : On 2 April 1982, Argentina invaded the Falkland Islands, an archipelago located about 400 miles off the Argentine coast. The surprise attack brought to a climax 140 years of controversy between Argentina and Great Britain over the sovereignty of the islands. Prime Minister Margaret Thatcher responded quickly to the Argentine show of force, and British units recaptured the islands within a month of their arrival. The Falklands War was short-lived, but significant. The outbreak of hostilities was the result of miscalculations on the part of the /Argentine military junta, which risked its political future and the economic stability of the country on a show of military force against a major world power. Unfortunately, Argentine strategy failed to anticipate the strong British popular reaction and the willingness of the prime minister to use the crisis to strengthen the position of her Conservative government at home. Britain was vulnerable to surprise attack essentially because her intelligence professionals overlooked signs of political unrest and certian military intelligence communications from Argentina. Also contributing to escalation of the conflict were the aborted U.S. diplomatic effort and reaction. The outcome of the Falklands War and the U.S. support of Britain reaffirmed the strength of the NATO alliance, but also had a negative impact on U.S. Latin American relations. The U.S. has lost its grip on the politics of Latin America, and even its diplomatic role as negotiator was questioned within the region.